The UNC Cheating Scandal and Why It Matters To You

Recently an academic cheating scandal rocked the world of college athletics. Over the last eighteen years more than three thousand students at the University of North Carolina (UNC) “took” classes that did not exist. In many cases this boosted GPAs to ensure athlete eligibility and the graduation of otherwise unqualified students. The NCAA as a whole faces increased scrutiny in light of the findings and without doubt the university’s football and basketball teams face some stiff penalties.

What surprises many interested observers of the unfolding events is the collective yawn coming from those outside the world of sports regarding this academic fraud. Half of the students involved had no affiliation with sports but few seem to care that numerous non-athletes cheated. This apathy is why this scandal matters to you.

Chart: Social Mobility

I appreciate what SMI has done here. I’ve seen tons of rankings put out by the various sources of colleges on all sorts of merits, including all around best colleges, top party schools and stone cold sober schools, best colleges for nature lovers, etc, etc. We must typically take these with a grain of salt because “best” is a subjective credential and the criterion can be misleading for students of other opinions. They also tend to not place all that much emphasis on the sorts of practical financial consequences their students must face once in the workaday world.

However, this ranking system, which incorporates metrics of former students’ financial health, is geared to “highlight the schools that do the best job of helping disadvantaged students graduate with the ability to start a career free of crushing levels of debt.” We’re getting warmer…

Come Up Short? Explore the Reverse Transfer

Normally in this space I write to an audience of would-be college students, high school upper classmen and others who seek to embark on the college path for the first time. Yet increasingly I run into, hear from, and read about the dropouts- former students who didn’t quite attain a degree for one reason or another.

Unfortunately, dropping out has become the norm, not the exception. For many the short-lived college experience can seem like such a waste; it’s back to square one with little to show except the ability to check the “some college” box on job applications and a trail of student debt. As we’ve seen previously those who have college credits but no degree have some earnings advantages over those who obtained no education beyond high school but have been largely in the same boat in terms of wage declines in this job market. What to do with a handful of college credits but no formal degree?Continue reading →

The Other Reason to Start at a JuCo

If you read much about college finances you’ll soon encounter advice to attend a junior college (JuCo) en route to a four-year degree. With rare exception the justification for doing so is the relatively lowcost of JuCo credits. The value of the JuCo education is typically expressed only in its relation to obtaining an overall cheaper bachelor’s degree.

Of course this is compelling news, but rarely truly exciting to a bachelor’s-minded student. We tend to equate cheaper with inferior, as is often the case with all sorts of goods and services. However, let’s now focus on another dynamic of the JuCo experience that often gets lost in the conversation: A junior college education can also provide increased earnings potential to someone seeking a four-year degree.

Chart: Savings Rates by Educational Level

(Click on chart above to go to original article)

This chart comes from Josh Zumbrun of the Wall Street Journal, who has reported and charted some findings of a recent data set from Moody’s Analytics. Recent research has shown that individual savings rates of late seem to be correlated to the amount of college education one has.

Those with a college degree and some college under their belt save at a much higher rate than their high school diploma and drop-out counterparts. This is encouraging news that despite the bleak reports of high college-associated debt loads and a dismal post-graduation job market college graduates tend to do better not only in terms of lifetime earnings but also lifetime savings.

Of course, what such data does not answer is why. Why do former college-goers save more?Continue reading →

Chart: The Relationship Between College Costs and Benefits

(Click on Chart to Go To Source)

These charts come to us courtesy the “Graphic Content” portion of a Wall Street Journal online edition I only recently stumbled upon. Here we have a succinct capture of the dilemma facing every college attendee today: the costs of college continue to go up at a consistently rapid pace while the earnings of college graduates have been in decline as of late.

I appreciate this combination of charts laid side by side. Of course, cost data only tell part of the story. Here we also get to take a look at the rise of college costs 1) in relation to inflation at large (everything has been converted to 2013 dollars), 2) in relation to the the economic benefits, and 3) according to type of degree, along with the benefits likewise. However you cut it we get a pretty grim picture of students face today.

Chart(s): Why is the Educational Level Wage Gap Widening?

Here we get a three-for-one thanks to an enlightening article by Rob Valletta titled “Higher Education, Wages, and Polarization” published in the January 12, 2015 edition of the FRBSF Economic Letter. This particular article and its chart series seeks not only to capture the “what” of the increasing wage gaps between high school, college, and graduate diploma/degree holders but the “why.” If the conclusions of the article are correct, then we get a substantial clue as to the potential earnings power of any given student as well as some applicability for those considering their options. Continue reading →

In this week’s chart we can yet again see the very real danger of relying on the flaw of averages to gauge the payoffs of a college degree. For instance, the generally true adage “college graduates earn $1 million more over a lifetime than high school-only graduates,” makes racking up enough debt to swing a hefty private school tuition seem like a no-brainer. However, as this handy chart shows, this only tells part of the story; graduate earnings vary quite widely based on majors/programs and within employment groupings. Continue reading →

If you play around with the chart for a while you quickly see not only the degrees/careers that pay more from the outset, but also those which reward (or not) years on the job. For instance, not only do early childhood education majors face dim wage prospects from the outset, they also don’t get much relative boost in pay in return for being on the job for a long period of time. Starting salaries run about $30,000 and after twenty years in the workforce median pay has only increased to $41,000. In contrast, almost any engineering or technical degree can expect consistent and healthy pay raises along the way.

This shouldn’t necessarily discourage anyone from pursuing this or that major, but certainly should temper one’s expectations of long-range returns. Many jobs may start discouragingly low on the totem pole in wages, but the promise of steady pay increases or brighter job prospects in return for sticking it out makes the education and early struggles worthwhile. Meanwhile, other careers will continue to hold you back with little hope of progress if you start out on the wrong foot, i.e. with a boatload of debt and other bills to pay.

We’ll explore this pain vs gain dynamic in our next Tip of the Week when I walk you through a process whereby you can calculate your expected Return on Investment (ROI), which will then enable you to properly determine the maximum out-of-pocket costs you should pay, depending on your career plans, in order to get to and through your chosen career in one piece.